Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 31, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ARIA | |
Entity Registrant Name | ARIAD PHARMACEUTICALS INC | |
Entity Central Index Key | 884,731 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 188,896,380 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 273,966 | $ 352,688 |
Accounts receivable, net | 14,418 | 8,397 |
Inventory | 1,325 | 979 |
Other current assets | 11,428 | 23,578 |
Total current assets | 301,137 | 385,642 |
Restricted cash | 11,334 | 11,308 |
Property and equipment, net | 227,227 | 203,027 |
Intangible and other assets, net | 3,279 | 3,893 |
Total assets | 542,977 | 603,870 |
Current liabilities: | ||
Accounts payable | 11,206 | 10,819 |
Current portion of long-term facility lease obligation | 7,100 | 6,707 |
Accrued compensation and benefits | 13,510 | 21,095 |
Accrued product development expenses | 19,442 | 13,958 |
Other accrued expenses | 12,894 | 11,514 |
Current portion of deferred revenue | 6,852 | 8,075 |
Other current liabilities | 20,210 | 17,830 |
Total current liabilities | 91,214 | 89,998 |
Long-term debt | 160,882 | 156,908 |
Long-term facility lease obligation | 212,246 | 189,320 |
Other long-term liabilities | 12,203 | 11,338 |
Deferred revenue | 80,199 | 75,505 |
Total liabilities | $ 556,744 | $ 523,069 |
Commitments and contingencies (note 9) | ||
Stockholders' equity (deficit): | ||
Preferred stock, $.01 par value; authorized 10,000,000 shares, none issued and outstanding | ||
Common stock, $.001 par value; authorized, 450,000,000 shares in 2015 and 2014; issued and outstanding, 188,714,154 shares in 2015 and 187,294,094 shares in 2014 | $ 189 | $ 187 |
Additional paid-in capital | 1,320,917 | 1,299,394 |
Accumulated other comprehensive loss | (4,444) | (4,185) |
Accumulated deficit | (1,330,429) | (1,214,595) |
Total stockholders' equity (deficit) | (13,767) | 80,801 |
Total liabilities and stockholders' equity (deficit) | $ 542,977 | $ 603,870 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 450,000,000 | 450,000,000 |
Common stock, shares issued | 188,714,154 | 187,294,094 |
Common stock, shares outstanding | 188,714,154 | 187,294,094 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenue: | ||||
Product revenue, net | $ 27,818 | $ 11,881 | $ 51,719 | $ 19,872 |
License revenue | 1,420 | 233 | 1,510 | 4,023 |
Total revenue | 29,238 | 12,114 | 53,229 | 23,895 |
Operating expenses: | ||||
Cost of product revenue | 488 | 2,395 | 1,183 | 3,683 |
Research and development expense | 38,739 | 31,794 | 78,183 | 60,348 |
Selling, general and administrative expense | 48,622 | 34,199 | 82,172 | 65,790 |
Total operating expenses | 87,849 | 68,388 | 161,538 | 129,821 |
Loss from operations | (58,611) | (56,274) | (108,309) | (105,926) |
Other income (expense): | ||||
Interest income | 22 | 21 | 41 | 44 |
Interest expense | (3,813) | (558) | (7,668) | (591) |
Foreign exchange (loss) gain | (458) | (4) | 615 | (45) |
Other income (expense), net | (4,249) | (541) | (7,012) | (592) |
Loss before provision for income taxes | (62,860) | (56,815) | (115,321) | (106,518) |
Provision for income taxes | 300 | 106 | 514 | 225 |
Net loss | $ (63,160) | $ (56,921) | $ (115,835) | $ (106,743) |
Net loss per share - basic and diluted | $ (0.33) | $ (0.30) | $ (0.62) | $ (0.57) |
Weighted-average number of shares of common stock outstanding - basic and diluted | 188,598 | 186,815 | 188,220 | 186,535 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net loss | $ (63,160) | $ (56,921) | $ (115,835) | $ (106,743) |
Other comprehensive income (loss): | ||||
Cumulative translation adjustment | (77) | 3 | 159 | 2 |
Amortization of prior service cost included in net periodic pension cost | (495) | 41 | (418) | 82 |
Other comprehensive income (loss) | (572) | 44 | (259) | 84 |
Comprehensive loss | $ (63,732) | $ (56,877) | $ (116,094) | $ (106,659) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (115,835) | $ (106,743) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation, amortization and impairment charges | 5,762 | 2,822 |
Stock-based compensation | 19,078 | 16,945 |
Deferred executive compensation expense | 119 | |
Increase (decrease) from: | ||
Accounts receivable | (6,022) | (3,665) |
Inventory | (347) | (506) |
Other assets | 12,678 | (356) |
Accounts payable and other accrued expenses | 2,205 | (3,445) |
Current portion of long-term facility lease obligation | 393 | |
Deferred revenue | 3,471 | 1,364 |
Deferred executive compensation paid | (2,630) | |
Net cash used in operating activities | (78,617) | (96,095) |
Cash flows from investing activities: | ||
Investment in property and equipment | (2,700) | (2,010) |
Net cash used in investing activities | (2,700) | (2,010) |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible debt | 194,000 | |
Proceeds from issuance of warrants | 27,580 | |
Purchase of convertible bond hedges | (43,220) | |
Repayment of long-term borrowings and capital lease obligation | (9,100) | |
Reimbursement of amounts related to facility lease obligation | 15 | |
Proceeds from issuance of common stock pursuant to stock option and purchase plans | 2,620 | 2,262 |
Payment of tax withholding obligations related to stock compensation | (174) | (558) |
Net cash provided by financing activities | 2,461 | 170,964 |
Effect of exchange rates on cash | 134 | 1 |
Net increase (decrease) in cash and cash equivalents | (78,722) | 72,860 |
Cash and cash equivalents, beginning of period | 352,688 | 237,179 |
Cash and cash equivalents, end of period | 273,966 | 310,039 |
Supplemental non-cash investing and financing disclosure: | ||
Capitalization of construction-in-progress related to facility lease obligation | 22,911 | 44,898 |
Investment in property and equipment included in accounts payable or accruals | $ 587 | 121 |
Deferred financing costs included in accounts payable or accruals | $ 1,079 |
Business
Business | 6 Months Ended |
Jun. 30, 2015 | |
Business | 1. Business Nature of Business ARIAD is a global oncology company whose vision is to transform the lives of cancer patients with breakthrough medicines. The Company’s mission is to discover, develop and commercialize small-molecule drugs to treat cancer in patients with the greatest unmet medical need – aggressive cancers where current therapies are inadequate. The Company is selling its cancer medicine, Iclusig ® |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. The Company has prepared the condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements and should be read in conjunction with the Company’s audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2014. The condensed consolidated balance sheet as of December 31, 2014 was derived from the audited consolidated balance sheet included in the Annual Report on Form 10-K In the opinion of management, the Company has prepared the accompanying condensed consolidated financial statements on the same basis as its audited financial statements, and these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year 2015. Principles of Consolidation The condensed consolidated financial statements include the accounts of ARIAD Pharmaceuticals, Inc. and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. Accounting Estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the consolidated financial statements and the reported amounts and disclosure of revenue and expenses during the reporting period. Significant estimates included in the Company’s financial statements include estimates associated with revenue recognition and the related adjustments, research and development accruals, inventory, leased buildings under construction and stock-based compensation. Actual results could differ from those estimates. Cash Equivalents Cash equivalents include short-term, highly liquid investments, with remaining maturities at the date of purchase of 90 days or less, and money market accounts. Restricted Cash Restricted cash consists of cash balances held as collateral for outstanding letters of credit related to the lease of the Company’s laboratory and office facilities, including those currently under construction in Cambridge, Massachusetts, and for other purposes. Accounts Receivable The Company extends credit to customers based on its evaluation of the customer’s financial condition. The Company records receivables for all billings when amounts are due under standard terms. Accounts receivable are stated at amounts due net of applicable prompt pay discounts and other contractual adjustments as well as an allowance for doubtful accounts. The Company assesses the need for an allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due, the customer’s ability to pay its obligation and the condition of the general economy and the industry as a whole. The Company will write off accounts receivable when the Company determines that they are uncollectible. Inventory The Company outsources the manufacturing of Iclusig and uses contract manufacturers that produce the raw and intermediate materials used in the production of Iclusig as well as the finished product. The Company currently has one supplier qualified for each step in the manufacturing process and is in the process of qualifying additional suppliers for certain steps of the production process of Iclusig. Accordingly, the Company has concentration risk associated with its manufacturing process and relies on its currently approved contract manufacturers for supply of its product. Inventory is composed of raw materials, intermediate materials, which are classified as work-in-process, and finished goods, which are goods that are available for sale. The Company records inventory at the lower of cost or market. The Company determines the cost of its inventory on a specific identification basis. The Company evaluates its inventory balances quarterly and if the Company identifies excess, obsolete or unsalable inventory, it writes down its inventory to its net realizable value in the period it is identified. These adjustments are recorded based upon various factors, including the level of product manufactured by the Company, the level of product in the distribution channel, current and projected demand for the foreseeable future and the expected shelf-life of the inventory components. The Company recorded such adjustments of $245,000 and $3.2 million for the six-month periods ended June 30, 2015 and 2014, respectively, which are recorded as a component of cost of product revenue in the accompanying condensed consolidated statements of operations. Inventory that is not expected to be used within one year is included in other assets, net, on the accompanying condensed consolidated balance sheet. Shipping and handling costs for product shipments are recorded as incurred in cost of product revenue along with costs associated with manufacturing the product sold and any inventory reserves or write-downs. Intangible Assets Intangible assets consist primarily of purchased technology and capitalized patent and license costs. The cost of purchased technology, patents and patent applications, costs incurred in filing patents and certain license fees are capitalized when recovery of the costs is probable. Capitalized costs related to purchased technology are amortized over the estimated useful life of the technology. Capitalized costs related to issued patents are amortized over a period not to exceed seventeen years or the remaining life of the patent, whichever is shorter, using the straight-line method. Capitalized license fees are amortized over the periods to which they relate. In addition, capitalized costs are expensed when it becomes determinable that the related patents, patent applications or technology will not be pursued. Impairment of Long-Lived Assets The Company reviews its long-lived assets, including the above-mentioned intangible assets, for impairment when events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Foreign Currency A subsidiary’s functional currency is the currency of the primary economic environment in which the subsidiary operates; normally, that is the currency of the environment in which a subsidiary primarily generates and expends cash. In making the determination of the appropriate functional currency for a subsidiary, the Company considers cash flow indicators, local market indicators, financing indicators and the subsidiary’s relationship with both the parent company and other subsidiaries. For subsidiaries that are primarily a direct and integral component or extension of the parent entity’s operations, the U.S. dollar is the functional currency. For foreign subsidiaries that transact in functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange at the balance sheet date. Income and expense items are translated at the average foreign exchange rate for the period. Adjustments resulting from the translation of the financial statements into U.S. dollars in these circumstances are excluded from the determination of net loss and are recorded in accumulated other comprehensive loss, a separate component of stockholders’ equity. For foreign subsidiaries where the functional currency is the U.S. dollar, monetary assets and liabilities are re-measured into U.S. dollars at the current exchange rate on the balance sheet date. Nonmonetary assets and liabilities are re-measured into U.S. dollars at historical exchange rates. Revenue and expense items are translated at average rates of exchange prevailing during each period. Adjustments resulting from remeasurement of financial statements into U.S. dollars in these circumstances are recorded in the net loss as foreign currency gains or losses. Revenue Recognition Revenue is recognized when the four basic criteria of revenue recognition are met: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. When the revenue recognition criteria are not met, we defer the recognition of revenue by recording deferred revenue until such time that all criteria are met. Product Revenue, Net The Company sells Iclusig in the United States to a single specialty pharmacy, Biologics, Inc. (“Biologics”). Biologics dispenses Iclusig directly to patients. In Europe, the Company sells Iclusig to retail pharmacies and hospital pharmacies, which dispense Iclusig directly to patients. These specialty pharmacies, retail pharmacies and hospital pharmacies are referred to as the Company’s customers. The Company provides the right of return to customers in the United States for unopened product for a limited time before and after its expiration date. European customers are provided the right to return product only in limited circumstances, such as damaged product. Revenue is generally recognized when risk of loss and title passes to the customer, provided all other revenue recognition criteria are met. Prior to 2015, with the Company’s limited sales history for Iclusig and the inherent uncertainties in estimating product returns, the Company had determined that the shipments of Iclusig to its United States customers did not meet the criteria for revenue recognition until it was dispersed to the patient. Prior to 2015, the Company recognized revenue in the United States, assuming all revenue recognition criteria had been met, when Iclusig was sold by its customers to patients. As of January 1, 2015, the Company concluded that it now had sufficient experience to estimate returns in the United States, as a result of over two years of sales experience. Accordingly, the Company now recognizes revenue in the United States upon shipment of Iclusig to Biologics. The Company has written contracts or standard terms of sale with each of its customers and delivery occurs when risk of loss and title passes to the customer. The Company evaluates the creditworthiness of each of its customers to determine whether collection is reasonably assured. In order to conclude that the price is fixed and determinable, the Company must be able to (i) calculate its gross product revenues from the sales to its customers and (ii) reasonably estimate its net product revenues. The Company calculates gross product revenues based on the wholesale acquisition cost that the Company charges its customers for Iclusig. The Company estimates its net product revenues by deducting from its gross product revenues (i) trade allowances, such as invoice discounts for prompt payment and customer fees, (ii) estimated government and private payor rebates, chargebacks and discounts, such as Medicare and Medicaid reimbursements in the United States, (iii) estimated product returns and (iv) estimated costs of incentives offered to certain indirect customers including patients. These deductions from gross revenue to determine net revenue are also referred to as gross to net deductions. Trade Allowances: Rebates, Chargebacks and Discounts: Other Adjustments: The following table summarizes the activity in each of the above product revenue allowances and reserve categories for the six-month period ended June 30, 2015: In thousands Trade Rebates, Other Total Balance, January 1, 2015 $ 72 $ 2,095 $ 360 $ 2,527 Provision 255 2,097 218 2,570 Payments or credits (228 ) (1,645 ) (158 ) (2,031 ) Balance, March 31, 2015 99 2,547 420 3,066 Provision 304 3,262 228 3,794 Payments or credits (289 ) (2,808 ) (62 ) (3,159 ) Balance, June 30, 2015 $ 114 $ 3,001 $ 586 $ 3,701 In 2012, prior to the Company obtaining marketing authorization for Iclusig in Europe, the French regulatory authority granted an Autorisation Temporaire d’Utilisation The price of Iclusig in France will become fixed or determinable upon completion of pricing and reimbursement negotiations. At that time, the Company will record revenue related to cumulative shipments as of that date in France, net of amounts that will be refunded to the health authority based on the results of the pricing and reimbursement negotiations. The aggregate gross selling price of the shipments under these programs amounted to $20.8 million through June 30, 2015, of which $19.4 million was received as of June 30, 2015. Amounts received from shipments in France are carried in other liabilities. License Revenue The Company generates revenue from license and collaboration agreements with third parties related to use of the Company’s technology and/or development and commercialization of products. Such agreements typically include payment to the Company of non-refundable upfront license fees, regulatory, clinical and commercial milestone payments, payment for services or supply of product and royalty payments on net sales. Revenue arrangements with multiple elements are divided into separate units of accounting if certain criteria are met, including whether the delivered element has stand-alone value to the customer. When deliverables are separable, consideration received is allocated to the separate units of accounting based on the relative selling price of each deliverable and the appropriate revenue recognition principles are applied to each unit. For arrangements with multiple elements, where the Company determines there is one unit of accounting, revenue associated with up-front payments will be recognized over the period beginning with the commencement of the final deliverable in the arrangement and over a period reflective of the Company’s longest obligation period within the arrangement on a straight-line-basis. At the inception of each agreement that includes milestone payments, the Company evaluates whether each milestone is substantive on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether: • the consideration is commensurate with either (1) our performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from our performance to achieve the milestone, • the consideration relates solely to past performance, and • the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. In making this assessment, the Company evaluates factors such as the clinical, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required, and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement. The Company recognizes revenues related to substantive milestones in full in the period in which the substantive milestone is achieved. If a milestone payment is not considered substantive, the Company recognizes the applicable milestone over the remaining period of performance. The Company will recognize royalty revenue, if any, based upon actual and estimated net sales by the licensee of licensed products in licensed territories, and in the period the sales in the licensed territories occur. Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist of accounts receivable from customers and cash held at financial institutions. The Company believes that such customers and financial institutions are of high credit quality. As of June 30, 2015, a portion of the Company’s cash and cash equivalent accounts were concentrated at a single financial institution, which potentially exposes the Company to credit risks. The Company does not believe that there is significant risk of non-performance by the financial institution and the Company’s cash on deposit at this financial institution is fully liquid. For the three-month and six-month periods ended June 30, 2015, one individual customer accounted for 78 percent and 78 percent of net product revenue, respectively. As of June 30, 2015, one individual customer accounted for 68 percent of accounts receivable. For the three-month and six-month periods ended June 30, 2014, one individual customer accounted for 67 percent and 63 percent of net product revenue, respectively. As of June 30, 2014, one customer accounted for 66 percent of accounts receivable. No other customer accounted for more than 10 percent of net product revenue for either 2015 or 2014 or accounts receivable as of either June 30, 2015 or 2014. Segment Reporting and Geographic Information The Company organizes itself into one operating segment reporting to the Chief Executive Officer. For the three-month periods ended June 30, 2015 and 2014, net product revenue from customers outside the United States totaled 22 percent and 33 percent of the Company’s consolidated net product revenue, respectively, with 8 percent and 22 percent, respectively, representing product revenue from customers in Germany. For the six-month periods ended June 30, 2015 and 2014, product revenue from customers outside the United States totaled 22 percent and 37 percent of the Company’s consolidated net product revenue respectively, with 9 percent and 26 percent, respectively, representing net product revenue from customers in Germany. Long lived assets outside the United States totaled $1.4 million at June 30, 2015 and $1.3 million at June 30, 2014. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements please refer to Note 1, “Nature of Business and Significant Accounting Policies” in the 2014 Annual Report on Form 10-K. The Company did not adopt any new pronouncements during the six months ended June 30, 2015 that had a material effect on the Company’s condensed consolidated financial statements. In April 2015, the FASB issued amended accounting guidance related to the presentation of debt issuance costs in the financial statements. This guidance requires an entity to present such costs in the balance sheet as a direct deduction from the related debt rather than as an asset. This amendment will be effective for us in the first quarter of fiscal 2017, with early adoption permitted. Adoption of the guidance would reclassify debt issuance costs from other assets to long-term obligations, less current portion within the condensed consolidated balance sheet. The Company does not expect the adoption to have a material impact on its financial position or results of operations, and are currently evaluating the timing of adoption. In May 2014, the FASB issued amended accounting guidance related to revenue recognition. This guidance is based on the principle that revenue is recognized in an amount that reflects the consideration to which an entity expects to be entitled in exchange for the transfer of goods or services to customers. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This amendment will be effective for the Company in the first quarter of fiscal 2018. The Company is continuing to evaluate the options for adoption and the impact on its financial position and results of operations. |
License and Collaboration Agree
License and Collaboration Agreements | 6 Months Ended |
Jun. 30, 2015 | |
License and Collaboration Agreements | 3. License and Collaboration Agreements Otsuka Pharmaceutical Co. Ltd On December 22, 2014, the Company entered into a collaboration agreement (the “Collaboration Agreement”) with Otsuka Pharmaceutical Co., Ltd. (“Otsuka”) pursuant to which Otsuka will commercialize and further develop Iclusig in Japan, China, South Korea, Indonesia, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Vietnam (the “Territory”). Key provisions of the Collaboration Agreement include the following: • The Company has granted an exclusive, non-assignable (except to affiliates) license to Otsuka to commercialize and distribute Iclusig in the Territory. • The Company has granted a co-exclusive license to Otsuka to conduct research and development in the Territory. • The Company will complete its ongoing pivotal trial of Iclusig in Japan and lead the preparation of the Japanese new drug application (the “JNDA”) on behalf of Otsuka and the Company. • Otsuka is responsible for filing of the JNDA on behalf of Otsuka and the Company, which is expected to occur in 2015. • The Company and Otsuka will form and participate on a joint development and commercialization committee (the “JDCC”) to oversee activities related to Iclusig in the Territory. • The Company is responsible for manufacture and supply of Iclusig to Otsuka in either bulk form or in final packaged form, as requested by Otsuka. • Otsuka is responsible for completion of final manufacturing, consisting of packaging and labeling of Iclusig for distribution in the Territory, as well as pricing and all other commercial activities by Otsuka within the Territory. Following approvals in each country, Otsuka will market and sell Iclusig and record sales. Otsuka is not allowed to manufacture bulk product, but must purchase its supply from the Company. Otsuka will be responsible for medical affairs activities, determining pricing and reimbursement and all commercial activities in the Territory. With respect to the JDCC, each party has ultimate decision making authority with respect to a specified limited set of issues, and for all other issues, the matter must be resolved by consensus or by an expedited arbitration process. In consideration for the licenses and other rights contained in the Collaboration Agreement, Otsuka paid the Company a non-refundable upfront payment of $77.5 million, less a refundable withholding tax in Japan of $15.8 million, and has agreed to pay the Company up to $80 million in future milestone payments upon obtaining further regulatory approvals in the Territory. Otsuka will pay royalties based on a percentage of net sales in each country until the later of (i) the expiry date of the composition patent in each country, (ii) the expiration of any orphan drug exclusivity period or other statutory designation that provides similar exclusivity, or (iii) 10 years after the date of first commercial sale in such country. Otsuka will also pay for the supply of Iclusig purchased from the Company at a price based on a percentage of net sales in each country. The Collaboration Agreement continues until the later of (x) the expiration of all royalty obligations in the Territory, or (y) the last sale by Otsuka in the Territory, or the last to expire patent in the Territory which is currently expected to be 2029. Under certain conditions, the Collaboration Agreement may be terminated by either party, in which case the Company would receive all rights to the regulatory filings related to Iclusig at our request, and the licenses granted to Otsuka would be terminated. For accounting purposes, because Otsuka’s ability to access the value of the distribution rights in the license absent the delivery of the other elements of the arrangement, in particular the manufacturing deliverables which remain within the Company’s control, the Company has concluded that the licenses and other deliverables do not have standalone value, and have combined all deliverables into a single unit of accounting. The nonrefundable upfront cash payment has been recorded as deferred revenue on our balance sheet and is being recognized as revenue on a straight-line basis commencing in April 2015, the time at which the Company has commenced providing all elements included in the Collaboration Agreement. The Company has recognized as license revenue approximately $1.3 million of the upfront fee for the three-month period ending June 30, 2015. The upfront payment was subject to a Japan withholding tax of $15.8 million which was remitted by Otsuka to the Japanese tax authorities. The Company determined at December 31, 2014 that the release of those funds to the Company was probable and therefore recorded a receivable for such amounts, with an offsetting amount included in deferred revenue. The Company received the $15.8 million from the Japanese tax authorities in April 2015. Medinol Ltd. The Company entered into an agreement with Medinol in 2005 pursuant to which the Company granted to Medinol a non-exclusive, world-wide, royalty-bearing license, under its patents and technology, to develop, manufacture and sell stents and other medical devices to deliver the Company’s mTOR inhibitor, ridaforolimus, to prevent reblockage of injured vessels following stent-assisted angioplasty. The term of the license agreement extends to the later to occur of the expiration of the Company’s patents relating to the rights granted to Medinol under the license agreement or fifteen years after the first commercial sale of a product developed under the agreement. Medinol is required under the license agreement to use commercially reasonable efforts to develop products. The Company is required under a related supply agreement to use commercially reasonable efforts to supply agreed-upon quantities of ridaforolimus to Medinol, and Medinol shall purchase such supply of ridaforolimus from the Company, for the development, manufacture and sale of products. The supply agreement is coterminous with the license agreement. These agreements may be terminated by either party for breach after a 90-day cure period. In addition, Medinol may terminate the agreements upon 30-day notice to the Company upon certain events, including if it determines, in its reasonable business judgment, that it is not in its business interest to continue the development of any product, and the Company may terminate the agreements upon 30-day notice to Medinol, if it determines that it is not in its business interest to continue development and regulatory approval efforts with respect to ridaforolimus. The license agreement provides for the payment by Medinol to the Company of an upfront license fee, payments based on achievement of development, regulatory and commercial milestones and royalties based on commercial sale of products developed under the agreement. In January 2014, Medinol initiated two registration trials of its NIRsupreme™ Ridaforolimus-Eluting Coronary Stent System. The commencement of enrollment in these clinical trials along with the submission of an investigational device exemption with the FDA triggered milestone payments to the Company of $3.75 million, which are recorded as license revenue in the accompanying consolidated statement of operations for the six month period ended June 30, 2014. The Company is eligible to receive additional, regulatory, clinical and commercial milestone payments of up to $34.75 million under the agreement if two products are successfully developed and commercialized. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2015 | |
Inventory | 4. Inventory All of the Company’s inventories relate to the manufacturing of Iclusig. The following table sets forth the Company’s inventories as of June 30, 2015 and December 31, 2014: In thousands 2015 2014 Raw materials $ — $ — Work in process 120 460 Finished goods 1,205 979 1,325 1,439 Current portion (1,325 ) (979 ) Non-current portion included in intangible and other assets, net $ — $ 460 The Company has not capitalized inventory costs related to its other drug development programs. Non-current inventory consists of work-in-process inventory that was manufactured in order to provide adequate supply of Iclusig in the United States and Europe and to support continued clinical development. |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2015 | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment, net, was comprised of the following at June 30, 2015 and December 31, 2014: In thousands 2015 2014 Leasehold improvements $ 22,717 $ 22,315 Construction in progress 220,907 196,027 Equipment and furniture 24,131 23,511 267,755 241,853 Less accumulated depreciation and amortization (40,528 ) (38,826 ) $ 227,227 $ 203,027 As of June 30, 2015 and December 31, 2014, the Company has recorded a facility lease obligation of $219.3 million and $196.0 million, respectively, related to a lease for a new facility under construction in Cambridge, Massachusetts. See Note 9 for further information. Depreciation and amortization expense was $848,000 and $1.2 million for the three-month periods ended June 30, 2015 and 2014, respectively, and $1.7 million, and $2.5 million for the six-month periods ended June 30, 2015 and 2014, respectively. |
Intangible and Other Assets, Ne
Intangible and Other Assets, Net | 6 Months Ended |
Jun. 30, 2015 | |
Intangible and Other Assets, Net | 6. Intangible and Other Assets, Net Intangible and other assets, net, were comprised of the following at June 30, 2015 and December 31, 2014: In thousands 2015 2014 Capitalized patent and license costs $ 5,975 $ 5,975 Less accumulated amortization (5,054 ) (5,036 ) 921 939 Inventory, non-current — 460 Other assets 2,358 2,494 $ 3,279 $ 3,893 |
Other Current Liabilities
Other Current Liabilities | 6 Months Ended |
Jun. 30, 2015 | |
Other Current Liabilities | 7. Other Current Liabilities Other current liabilities consisted of the following at June 30, 2015 and December 31, 2014: In thousands 2015 2014 Amounts received in advance of revenue recognition $ 19,684 $ 17,186 Other 526 644 $ 20,210 $ 17,830 Amounts received in advance of revenue recognition consist of payments received from customers in France. |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 30, 2015 | |
Long-term Debt | 8. Long-term Debt 3.625 percent Convertible Notes due 2019 On June 17, 2014, the Company issued $200.0 million aggregate principal amount of 3.625 percent convertible senior notes due 2019 (the “convertible notes”). The Company received net proceeds of $192.9 million from the sale of the convertible notes, after deducting fees of $6.0 million and expenses of $1.1 million. At the same time, in order to reduce the potential dilution to the Company’s common stockholders and/or offset any cash payments in excess of the principal amount due upon conversion of the convertible notes, the Company used $43.2 million of the net proceeds from the sale of the convertible notes to pay the cost of convertible bond hedges which cost was partially offset by $27.6 million in proceeds to the Company from the related sale of warrants to the counter-party in the convertible bond hedge transaction. The outstanding convertible note balances as of June 30, 2015 and December 31, 2014 consisted of the following: In thousands 2015 2014 Principal $ 200,000 $ 200,000 Less: debt discount, net (39,118 ) (43,092 ) Net carrying amount $ 160,882 $ 156,908 The Company determined the expected life of the debt was equal to the five-year term on the convertible notes. The effective interest rate on the liability component was 9.625 percent for the period from the date of issuance through June 30, 2015. Interest expense related to the convertible notes during for the three-month and six-month periods ended June 30, 2015 consisted of the following: Three Months Ended June 30, Six Months Ended June 30, In thousands 2015 2014 2015 2014 Contractual interest expense $ 1,813 $ 262 $ 3,625 $ 262 Amortization of debt discount 1,965 269 3,973 269 Amortization of debt issuance costs 35 5 70 5 $ 3,813 $ 536 $ 7,668 $ 536 |
Leases, Licensed Technology and
Leases, Licensed Technology and Other Commitments | 6 Months Ended |
Jun. 30, 2015 | |
Leases, Licensed Technology and Other Commitments | 9. Leases, Licensed Technology and Other Commitments Facility Leases The Company conducts the majority of its operations in a 100,000 square foot office and laboratory facility under a non-cancelable operating lease that extends to July 2019 with two consecutive five-year renewal options. The Company maintains an outstanding letter of credit of $1.4 million in accordance with the terms of the amended lease. In May 2012, the Company entered into a lease agreement for an additional 26,000 square feet of office space which expires in August 2017. Future non-cancelable minimum annual rental payments through July 2019 under these leases are $3.1 million remaining in 2015, $5.9 million in 2016, $6.0 million in 2017, $6.1 million in 2018 and $3.6 million in 2019. Binney Street, Cambridge, Massachusetts In January 2013, the Company entered into a lease agreement for approximately 244,000 square feet of laboratory and office space in two adjacent, connected buildings which are under construction in Cambridge, Massachusetts. Under the terms of the original lease, the Company leased all of the rentable space in one of the two buildings and a portion of the available space in the second building. In September 2013, the Company entered into a lease amendment to lease all of the remaining space, approximately 142,000 square feet, in the second building, for an aggregate of 386,000 square feet in both buildings. The terms of the lease amendment were consistent with the terms of the original lease. Construction of the core and shell of the building was completed in March 2015, at which time, pursuant to a second amendment to the lease in March 2015, the Company commenced making lease payments. Construction of tenant improvements in the building will commence now that the core and shell have been completed. Construction of the tenant improvements is expected to be completed in the third quarter of 2016. In connection with this lease, the landlord is providing a tenant improvement allowance for the costs associated with the design, engineering, and construction of tenant improvements for the leased facility. The tenant improvements will be in accordance with the Company’s plans and include fit-out of the buildings to construct appropriate laboratory and office space, subject to approval by the landlord. To the extent the stipulated tenant allowance provided by the landlord is exceeded, the Company is obligated to fund all costs incurred in excess of the tenant allowance. The scope of the planned tenant improvements do not qualify as “normal tenant improvements” under the lease accounting guidance. Accordingly, for accounting purposes, the Company is the deemed owner of the buildings during the construction period. As construction progresses, the Company records the project construction costs incurred as an asset, along with a corresponding facility lease obligation, on the consolidated balance sheet for the total amount of project costs incurred whether funded by the Company or the landlord. Upon completion of the buildings, the Company will determine if the asset and corresponding financing obligation should continue to be carried on its consolidated balance sheet under the appropriate accounting guidance. Based on the current terms of the lease, the Company expects to continue to be the deemed owner of the buildings upon completion of the construction period. As of June 30, 2015, the Company has recorded construction in progress and a facility lease obligation of $220.9 million and $219.3 million, respectively, including the current portion of the obligation of $7.1 million included in current liabilities. The initial term of the lease is for 15 years from substantial completion of the buildings with options to renew for three terms of five years each at market-based rates. The base rent is subject to increases over the term of the lease. Based on the original and amended leased space, the non-cancelable minimum annual lease payments for the annual periods beginning upon commencement of the lease are $3.8 million, $8.7 million, $25.5 million, $31.0 million and $31.5 million in the first five years of the lease and $357.4 million in total thereafter, plus the Company’s share of the facility operating expenses and other costs that are reimbursable to the landlord under the lease. The Company maintains a letter of credit as security for the lease of $9.2 million, which is supported by restricted cash. Lausanne, Switzerland In January 2013, the Company entered into a lease agreement for approximately 22,000 square feet of office space in a building, which the Company occupied in 2014. The term of the lease is for ten years, with options for extension of the term and an early termination at the Company’s option after five years. Future non-cancelable minimum annual lease payments under their lease are expected to be approximately $0.5 million remaining in 2015, $1.1 million in 2016, 2017, 2018, and 2019 and $4.5 million in total thereafter. Total rent expense for the leases described above as well as other Company leases for the three-month and six-month periods ended June 30, 2015 and 2014 was $2.6 million, and $1.9 million, respectively, and $4.5 million and $3.8 million respectively. Contingent rent for the three-month and six-month periods ended June 30, 2015 and 2014 was $327,000 and $158,000, respectively, and $539,000 and $338,000 respectively. Total future non-cancelable minimum annual rental payments for the leases described above as well as other Company leases, for the next five years and thereafter are $7.7 million, $15.9 million, $32.7 million, $38.2 million, $36.2 million and $361.9 million, respectively. Other Commitments The Company has entered into employment agreements with each of the officers of the Company. The agreements for these officers have remaining terms as of June 30, 2015 extending through the end of 2016 or 2017, providing for aggregate base salaries of $4.5 million for 2015, $12.1 million for 2016 and $7.9 million for 2017. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity (Deficit) | 10. Stockholders’ Equity (Deficit) The changes in stockholders’ equity (deficit) for the six-month period ended June 30, 2015 were as follows: Common Stock Additional Other Accumulated $ in thousands Shares Amount Capital Income (Loss) Deficit Total Balance, January 1, 2015 187,294,094 $ 187 $ 1,299,394 $ (4,185 ) $ (1,214,595 ) $ 80,801 Issuance of common stock pursuant to ARIAD stock plans 1,420,060 2 2,620 2,621 Stock-based compensation 19,078 19,078 Payment of tax withholding obligations related to stock-based compensation (175 ) (175 ) Other comprehensive loss (259 ) (259 ) Net loss (115,835 ) (115,835 ) Balance, June 30, 2015 188,714,514 $ 189 $ 1,320,917 $ (4,444 ) $ (1,330,429 ) $ (13,767 ) |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value of Financial Instruments | 11. Fair Value of Financial Instruments At June 30, 2015 and December 31, 2014, the carrying amounts of cash equivalents, accounts payable and accrued liabilities approximate fair value because of their short-term nature. All such measurements are Level 2 measurements in the fair value hierarchy. The fair value of the convertible notes, which differs from their carrying value, is influenced by interest rates and stock price and stock price volatility and is determined by prices for the convertible notes observed in market trading. The market for trading of the convertible notes is not considered to be an active market and therefore the estimate of fair value is based on Level 2 inputs. The estimated fair value of the convertible notes, face value of $200 million, was $231.5 million at June 30, 2015 and $203.4 million at December 31, 2014, respectively. |
Stock Compensation
Stock Compensation | 6 Months Ended |
Jun. 30, 2015 | |
Stock Compensation | 12. Stock Compensation ARIAD Stock Option and Stock Plans The Company’s 2001, 2006 and 2014 stock option and stock plans provide for the award of nonqualified and incentive stock options, stock grants, restricted stock units, performance share units and other equity-based awards to officers, directors, employees and consultants of the Company. Stock options become exercisable as specified in the related option certificate, typically over a three or four-year period, and expire ten years from the date of grant. Stock grants, restricted stock units and performance share units provide the recipient with ownership of common stock subject to terms of vesting, any rights the Company may have to repurchase the shares granted or other restrictions. The 2001 and 2006 plans have no shares remaining available for grant, although existing stock options granted under these plans remain outstanding. As of June 30, 2015, there were 9,451,009 shares available for awards under the 2014 plan. The Company generally issues new shares upon the exercise or vesting of stock plan awards. Employee Stock Purchase Plan In 1997, the Company adopted the 1997 Employee Stock Purchase Plan (“ESPP”) and reserved 500,000 shares of common stock for issuance under this plan. The ESPP was amended in June 2008 to reserve an additional 500,000 shares of common stock for issuance and the plan was further amended in 2009 and in June 2014 to reserve an additional 750,000 shares of common stock for issuance pursuant to each of those amendments. Under this plan, substantially all of the Company’s employees may, through payroll withholdings, purchase shares of the Company’s common stock at a price of 85 percent of the lesser of the fair market value at the beginning or end of each six-month withholding period. For the six-month periods ended June 30, 2015 and 2014, 128,151 and 118,644 shares of common stock were issued under the plan, respectively. Compensation cost is equal to the fair value of the discount on the date of grant and is recognized as compensation in the period of purchase. Stock-Based Compensation The Company’s statements of operations included total compensation cost from awards under the plans and purchases under the ESPP for the three-month and six-month periods ended June 30, 2015 and 2014, as follows: Three Months Ended June 30, Six Months Ended June 30, In thousands 2015 2014 2015 2014 Compensation cost from: Stock options $ 4,129 $ 4,164 $ 8,371 $ 8,844 Stock and stock units 6,395 4,178 10,461 7,826 Purchases of common stock at a discount 120 107 246 275 $ 10,644 $ 8,449 $ 19,078 $ 16,945 Compensation cost included in: Research and development expenses $ 4,180 $ 3,633 $ 7,996 $ 7,341 Selling, general and administrative expenses 6,464 4,816 11,082 9,604 $ 10,644 $ 8,449 $ 19,078 $ 16,945 Stock Options Stock options are granted with an exercise price equal to the closing market price of the Company’s common stock on the date of grant. Stock options generally vest ratably over three or four years and have contractual terms of ten years. Stock options are valued using the Black-Scholes option valuation model and compensation cost is recognized based on such fair value over the period of vesting on a straight-line basis. Stock option activity under the Company’s stock plans for the six-month period ended June 30, 2015 was as follows: Number of Weighted Options outstanding, January 1, 2015 10,148,087 $ 10.09 Granted 895,730 $ 8.06 Forfeited (378,848 ) $ 10.41 Exercised (518,321 ) $ 5.94 Options outstanding, June 30, 2015 10,146,648 $ 10.11 Stock and Stock Unit Grants Stock and stock unit grants carry restrictions as to resale for periods of time or vesting provisions over time as specified in the grant. Stock and stock unit grants are valued at the closing market price of the Company’s common stock on the date of grant and compensation expense is recognized over the requisite service period, vesting period or period during which restrictions remain on the common stock or stock units granted. Stock and stock unit activity under the Company’s stock plans for the six-month period ended June 30, 2015 was as follows: Number of Weighted Stock units outstanding, January 1, 2015 3,503,153 $ 9.97 Granted / awarded 3,002,575 $ 8.70 Forfeited (66,793 ) $ 7.83 Vested or restrictions lapsed (937,137 ) $ 10.12 Stock units outstanding, June 30, 2015 5,501,798 $ 9.28 The total fair value of stock and stock unit awards that vested as of June 30, 2015 and 2014 was $6.8 million and $4.1 million, respectively. The total unrecognized compensation expense for restricted shares or units that have been granted and are probable to become vested was $21.4 million at June 30, 2015 and will be recognized over 1.7 years on a weighted average basis. Included in the table above are performance share units which were awarded from 2012 to 2015 as follows: Years of Accrual Number of Units Description of Metric 2012 121,200 Approval of Iclusig in Europe – achieved in 2013 2013 316,000 Brigatinib clinical trial enrollment (100%) 2014 1,044,000 Iclusig clinical trial enrollment (50%); cumulative 2 year revenues from sales of Iclusig (50%) 2015 751,300 Iclusig clinical trial enrollment (325,000 units); 2015 revenues from sales of Iclusig (325,000 units); total relative return on common stock 2015-2017 (101,300 units) The Company recognizes compensation expense for performance share units when the achievement of the metric is determined to be probable of occurrence. The total number of units earned, and related compensation cost, may be up to 60 percent higher depending on the level or timing of achievement of the metric as defined in the specific award agreement. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2015 | |
Net Loss Per Share | 13. Net Loss Per Share Basic net loss per share amounts have been computed based on the weighted-average number of common shares outstanding. Diluted net loss per share amounts have been computed based on the weighted-average number of common shares outstanding plus the dilutive effect, if any, of potential common shares. The computation of potential common shares has been performed using the treasury stock method. Because of the net loss reported in each period, diluted and basic net loss per share amounts are the same. The calculation of net loss and the number of shares used to compute basic and diluted earnings per share for the three-month and six-month periods ended June 30, 2015 and 2014 are as follows: Three Months Ended June 30, Six Months Ended June 30, In thousands, except per share data 2015 2014 2015 2014 Net loss $ (63,160 ) $ (56,921 ) $ (115,835 ) $ (106,743 ) Net loss per share – basic and diluted $ (0.33 ) $ (0.30 ) $ (0.62 ) $ (0.57 ) Weighted average shares – basic and diluted 188,598 186,815 188,220 186,535 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss) | 14. Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) for three-month and six-month periods ended June 30, 2015 were as follows: In thousands Cumulative Defined Total Balance, April 1, 2015 $ 410 $ (4,282 ) $ (3,872 ) Other comprehensive income (loss) (77 ) (495 ) (572 ) Balance, June 30, 2015 $ 333 $ (4,777 ) $ (4,444 ) In thousands Cumulative Defined Total Balance, January 1, 2015 $ 174 $ (4,359 ) $ (4,185 ) Other comprehensive income (loss) 159 (418 ) (259 ) Balance, June 30, 2015 $ 333 $ (4,777 ) $ (4,444 ) |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2015 | |
Income Taxes | 15. Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and tax basis of assets and liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. The Company provides a valuation allowance when it is more likely than not that deferred tax assets will not be realized. The Company’s tax provision reflects that the Company has an international corporate structure and certain subsidiaries are profitable on a stand-alone basis. Accordingly, a tax provision is reflected for the taxes incurred in such jurisdictions. In addition, the Company has recognized a prepaid tax related to the tax consequences arising from intercompany transactions and is amortizing such prepaid tax over the period that the assets transferred are being amortized. The total provision for income taxes for the three-month and six-month periods ended June 30, 2015 and 2014 was $300,000 and $106,000, respectively, and $514,000 and $225,000, respectively. The Company does not recognize a tax benefit for uncertain tax positions unless it is more likely than not that the position will be sustained upon examination by tax authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded for these positions is measured at the largest amount of cumulative benefit that has greater than a 50 percent likelihood of being realized upon ultimate settlement. Deferred tax assets that do not meet these recognition criteria are not recorded and the Company recognizes a liability for uncertain tax positions that may result in tax payments. If such unrecognized tax benefits were realized and not subject to valuation allowances, the entire amount would impact the tax provision. No uncertain tax positions are expected to be resolved within the next twelve months. During the six-month period ended June 30, 2015, the Internal Revenue Service completed its audit of the Company’s 2012 U.S. federal income tax return, and issued a “no-change” letter indicating that no adjustments would be made to the return as filed. |
Restructuring Actions
Restructuring Actions | 6 Months Ended |
Jun. 30, 2015 | |
Restructuring Actions | 16. Restructuring Actions In the first quarter of fiscal 2014, the Company incurred expenses of $4.8 million associated with employee workforce reductions of approximately 155 positions implemented in November 2013. The Company recorded $2.2 million of the employee separation costs in research and development expense and $2.6 million in selling, general and administrative expense. The restructuring charges were paid by the end of June 30, 2014. |
Defined Benefit Pension Obligat
Defined Benefit Pension Obligation | 6 Months Ended |
Jun. 30, 2015 | |
Defined Benefit Pension Obligation | 17. Defined Benefit Pension Obligation The Company maintains a defined benefit pension plan for employees in its Switzerland subsidiary. The plan provides benefits to employees upon retirement, death or disability. The net periodic benefit cost for the defined benefit pension plan for the three-month and six-month periods ended June 30, 2015 and 2014 was as follows: Three Months Ended June 30, Six Months Ended June 30, In thousands 2015 2014 2015 2014 Service cost $ 440 $ 303 $ 888 $ 591 Interest cost 19 46 69 89 Expected return on plan assets (12 ) (38 ) (49 ) (75 ) Amortization of prior service cost 87 41 164 82 Net periodic benefit cost $ 534 $ 352 $ 1,072 $ 687 The Company expects to contribute $1.7 million in total to the plan in 2015. |
Litigation
Litigation | 6 Months Ended |
Jun. 30, 2015 | |
Litigation | 18. Litigation On October 10, 2013, October 17, 2013, December 3, 2013 and December 6, 2013, purported shareholder class actions, styled Jimmy Wang v. ARIAD Pharmaceuticals, Inc., et al. James L. Burch v. ARIAD Pharmaceuticals, Inc., et al. Greater Pennsylvania Carpenters’ Pension Fund v. ARIAD Pharmaceuticals, Inc., et al Nabil Elmachtoub v. ARIAD Pharmaceuticals, Inc., et al On November 6, 2013, a purported derivative lawsuit, styled Yu Liang v. ARIAD Pharmaceuticals, Inc., et al., Arkady Livitz v. Harvey J. Berger, et al Yu Liang On March 11, 2015, a product liability lawsuit, styled Thomas Montalbano, Jr. v. ARIAD Pharmaceuticals, Inc., The Company believes those actions are without merit. At this time the Company has not recorded a liability related to damages in connection with those matters because it believes that any potential loss is not probable or reasonably estimable under U.S. GAAP. In addition, due to the early stages of the matters described above, the Company cannot reasonably estimate the possible loss or range of loss, if any, that may result from those matters. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events | 19. Subsequent Events Royalty Financing On July 28, 2015, the Company entered into a royalty financing agreement with PDL BioPharma, Inc. (“PDL”) whereby the Company received an initial payment of $50 million in exchange for a percentage of global net revenues from sales of Iclusig (as defined in the agreement) until PDL receives a fixed internal rate on return of the funds its advances the Company. The Company will receive an additional $50 million one year from the effective date with the option to receive an additional $100 million in up to two tranches between the six-month and twelve-month anniversary dates. Under the agreement, the Company will pay PDL a percentage of global Iclusig net product revenues subject to an annual maximum payment of $20 million per year through 2018. The rate will be 2.5 percent for the first year and increase to 5 percent in year two through the end of 2018 and 6.5 percent from 2019 until PDL receives a 10 percent internal rate of return. If the Company draws down in excess of $150 million, the 6.5 percent rate would increase to 7.5 percent for the remainder of the agreement. If PDL has not received total cumulative payments under this agreement that are at least equal to the amounts they have advanced to the Company by the fifth anniversary of each funding date, the Company is required to pay to PDL an amount equal to the shortfall. PDL retains the option to require the Company to repurchase the royalty stream (the “put” option) upon the occurrence of specified events. Similarly, the Company has the option to repurchase the royalty stream at any time. Both the put and call options can be exercised at a price which is equal to the greater of the amount that would generate a specified rate of return of 10 percent after taking into account the amount and timing of all payments made to PDL by the Company or a specified multiple of the amounts paid by PDL under the agreement. |
Significant Accounting Polici26
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. The Company has prepared the condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements and should be read in conjunction with the Company’s audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2014. The condensed consolidated balance sheet as of December 31, 2014 was derived from the audited consolidated balance sheet included in the Annual Report on Form 10-K In the opinion of management, the Company has prepared the accompanying condensed consolidated financial statements on the same basis as its audited financial statements, and these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year 2015. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of ARIAD Pharmaceuticals, Inc. and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. |
Accounting Estimates | Accounting Estimates The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosure of assets and liabilities at the date of the consolidated financial statements and the reported amounts and disclosure of revenue and expenses during the reporting period. Significant estimates included in the Company’s financial statements include estimates associated with revenue recognition and the related adjustments, research and development accruals, inventory, leased buildings under construction and stock-based compensation. Actual results could differ from those estimates. |
Cash Equivalents | Cash Equivalents Cash equivalents include short-term, highly liquid investments, with remaining maturities at the date of purchase of 90 days or less, and money market accounts. |
Restricted Cash | Restricted Cash Restricted cash consists of cash balances held as collateral for outstanding letters of credit related to the lease of the Company’s laboratory and office facilities, including those currently under construction in Cambridge, Massachusetts, and for other purposes. |
Accounts Receivable | Accounts Receivable The Company extends credit to customers based on its evaluation of the customer’s financial condition. The Company records receivables for all billings when amounts are due under standard terms. Accounts receivable are stated at amounts due net of applicable prompt pay discounts and other contractual adjustments as well as an allowance for doubtful accounts. The Company assesses the need for an allowance for doubtful accounts by considering a number of factors, including the length of time trade accounts receivable are past due, the customer’s ability to pay its obligation and the condition of the general economy and the industry as a whole. The Company will write off accounts receivable when the Company determines that they are uncollectible. |
Inventory | Inventory The Company outsources the manufacturing of Iclusig and uses contract manufacturers that produce the raw and intermediate materials used in the production of Iclusig as well as the finished product. The Company currently has one supplier qualified for each step in the manufacturing process and is in the process of qualifying additional suppliers for certain steps of the production process of Iclusig. Accordingly, the Company has concentration risk associated with its manufacturing process and relies on its currently approved contract manufacturers for supply of its product. Inventory is composed of raw materials, intermediate materials, which are classified as work-in-process, and finished goods, which are goods that are available for sale. The Company records inventory at the lower of cost or market. The Company determines the cost of its inventory on a specific identification basis. The Company evaluates its inventory balances quarterly and if the Company identifies excess, obsolete or unsalable inventory, it writes down its inventory to its net realizable value in the period it is identified. These adjustments are recorded based upon various factors, including the level of product manufactured by the Company, the level of product in the distribution channel, current and projected demand for the foreseeable future and the expected shelf-life of the inventory components. The Company recorded such adjustments of $245,000 and $3.2 million for the six-month periods ended June 30, 2015 and 2014, respectively, which are recorded as a component of cost of product revenue in the accompanying condensed consolidated statements of operations. Inventory that is not expected to be used within one year is included in other assets, net, on the accompanying condensed consolidated balance sheet. Shipping and handling costs for product shipments are recorded as incurred in cost of product revenue along with costs associated with manufacturing the product sold and any inventory reserves or write-downs. |
Intangible Assets | Intangible Assets Intangible assets consist primarily of purchased technology and capitalized patent and license costs. The cost of purchased technology, patents and patent applications, costs incurred in filing patents and certain license fees are capitalized when recovery of the costs is probable. Capitalized costs related to purchased technology are amortized over the estimated useful life of the technology. Capitalized costs related to issued patents are amortized over a period not to exceed seventeen years or the remaining life of the patent, whichever is shorter, using the straight-line method. Capitalized license fees are amortized over the periods to which they relate. In addition, capitalized costs are expensed when it becomes determinable that the related patents, patent applications or technology will not be pursued. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets, including the above-mentioned intangible assets, for impairment when events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. |
Foreign Currency | Foreign Currency A subsidiary’s functional currency is the currency of the primary economic environment in which the subsidiary operates; normally, that is the currency of the environment in which a subsidiary primarily generates and expends cash. In making the determination of the appropriate functional currency for a subsidiary, the Company considers cash flow indicators, local market indicators, financing indicators and the subsidiary’s relationship with both the parent company and other subsidiaries. For subsidiaries that are primarily a direct and integral component or extension of the parent entity’s operations, the U.S. dollar is the functional currency. For foreign subsidiaries that transact in functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange at the balance sheet date. Income and expense items are translated at the average foreign exchange rate for the period. Adjustments resulting from the translation of the financial statements into U.S. dollars in these circumstances are excluded from the determination of net loss and are recorded in accumulated other comprehensive loss, a separate component of stockholders’ equity. For foreign subsidiaries where the functional currency is the U.S. dollar, monetary assets and liabilities are re-measured into U.S. dollars at the current exchange rate on the balance sheet date. Nonmonetary assets and liabilities are re-measured into U.S. dollars at historical exchange rates. Revenue and expense items are translated at average rates of exchange prevailing during each period. Adjustments resulting from remeasurement of financial statements into U.S. dollars in these circumstances are recorded in the net loss as foreign currency gains or losses. |
Revenue Recognition | Revenue Recognition Revenue is recognized when the four basic criteria of revenue recognition are met: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. When the revenue recognition criteria are not met, we defer the recognition of revenue by recording deferred revenue until such time that all criteria are met. Product Revenue, Net The Company sells Iclusig in the United States to a single specialty pharmacy, Biologics, Inc. (“Biologics”). Biologics dispenses Iclusig directly to patients. In Europe, the Company sells Iclusig to retail pharmacies and hospital pharmacies, which dispense Iclusig directly to patients. These specialty pharmacies, retail pharmacies and hospital pharmacies are referred to as the Company’s customers. The Company provides the right of return to customers in the United States for unopened product for a limited time before and after its expiration date. European customers are provided the right to return product only in limited circumstances, such as damaged product. Revenue is generally recognized when risk of loss and title passes to the customer, provided all other revenue recognition criteria are met. Prior to 2015, with the Company’s limited sales history for Iclusig and the inherent uncertainties in estimating product returns, the Company had determined that the shipments of Iclusig to its United States customers did not meet the criteria for revenue recognition until it was dispersed to the patient. Prior to 2015, the Company recognized revenue in the United States, assuming all revenue recognition criteria had been met, when Iclusig was sold by its customers to patients. As of January 1, 2015, the Company concluded that it now had sufficient experience to estimate returns in the United States, as a result of over two years of sales experience. Accordingly, the Company now recognizes revenue in the United States upon shipment of Iclusig to Biologics. The Company has written contracts or standard terms of sale with each of its customers and delivery occurs when risk of loss and title passes to the customer. The Company evaluates the creditworthiness of each of its customers to determine whether collection is reasonably assured. In order to conclude that the price is fixed and determinable, the Company must be able to (i) calculate its gross product revenues from the sales to its customers and (ii) reasonably estimate its net product revenues. The Company calculates gross product revenues based on the wholesale acquisition cost that the Company charges its customers for Iclusig. The Company estimates its net product revenues by deducting from its gross product revenues (i) trade allowances, such as invoice discounts for prompt payment and customer fees, (ii) estimated government and private payor rebates, chargebacks and discounts, such as Medicare and Medicaid reimbursements in the United States, (iii) estimated product returns and (iv) estimated costs of incentives offered to certain indirect customers including patients. These deductions from gross revenue to determine net revenue are also referred to as gross to net deductions. Trade Allowances: Rebates, Chargebacks and Discounts: Other Adjustments: The following table summarizes the activity in each of the above product revenue allowances and reserve categories for the six-month period ended June 30, 2015: In thousands Trade Rebates, Other Total Balance, January 1, 2015 $ 72 $ 2,095 $ 360 $ 2,527 Provision 255 2,097 218 2,570 Payments or credits (228 ) (1,645 ) (158 ) (2,031 ) Balance, March 31, 2015 99 2,547 420 3,066 Provision 304 3,262 228 3,794 Payments or credits (289 ) (2,808 ) (62 ) (3,159 ) Balance, June 30, 2015 $ 114 $ 3,001 $ 586 $ 3,701 In 2012, prior to the Company obtaining marketing authorization for Iclusig in Europe, the French regulatory authority granted an Autorisation Temporaire d’Utilisation The price of Iclusig in France will become fixed or determinable upon completion of pricing and reimbursement negotiations. At that time, the Company will record revenue related to cumulative shipments as of that date in France, net of amounts that will be refunded to the health authority based on the results of the pricing and reimbursement negotiations. The aggregate gross selling price of the shipments under these programs amounted to $20.8 million through June 30, 2015, of which $19.4 million was received as of June 30, 2015. Amounts received from shipments in France are carried in other liabilities. License Revenue The Company generates revenue from license and collaboration agreements with third parties related to use of the Company’s technology and/or development and commercialization of products. Such agreements typically include payment to the Company of non-refundable upfront license fees, regulatory, clinical and commercial milestone payments, payment for services or supply of product and royalty payments on net sales. Revenue arrangements with multiple elements are divided into separate units of accounting if certain criteria are met, including whether the delivered element has stand-alone value to the customer. When deliverables are separable, consideration received is allocated to the separate units of accounting based on the relative selling price of each deliverable and the appropriate revenue recognition principles are applied to each unit. For arrangements with multiple elements, where the Company determines there is one unit of accounting, revenue associated with up-front payments will be recognized over the period beginning with the commencement of the final deliverable in the arrangement and over a period reflective of the Company’s longest obligation period within the arrangement on a straight-line-basis. At the inception of each agreement that includes milestone payments, the Company evaluates whether each milestone is substantive on the basis of the contingent nature of the milestone. This evaluation includes an assessment of whether: • the consideration is commensurate with either (1) our performance to achieve the milestone, or (2) the enhancement of the value of the delivered item(s) as a result of a specific outcome resulting from our performance to achieve the milestone, • the consideration relates solely to past performance, and • the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. In making this assessment, the Company evaluates factors such as the clinical, regulatory, commercial and other risks that must be overcome to achieve the respective milestone, the level of effort and investment required, and whether the milestone consideration is reasonable relative to all deliverables and payment terms in the arrangement. The Company recognizes revenues related to substantive milestones in full in the period in which the substantive milestone is achieved. If a milestone payment is not considered substantive, the Company recognizes the applicable milestone over the remaining period of performance. The Company will recognize royalty revenue, if any, based upon actual and estimated net sales by the licensee of licensed products in licensed territories, and in the period the sales in the licensed territories occur. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist of accounts receivable from customers and cash held at financial institutions. The Company believes that such customers and financial institutions are of high credit quality. As of June 30, 2015, a portion of the Company’s cash and cash equivalent accounts were concentrated at a single financial institution, which potentially exposes the Company to credit risks. The Company does not believe that there is significant risk of non-performance by the financial institution and the Company’s cash on deposit at this financial institution is fully liquid. For the three-month and six-month periods ended June 30, 2015, one individual customer accounted for 78 percent and 78 percent of net product revenue, respectively. As of June 30, 2015, one individual customer accounted for 68 percent of accounts receivable. For the three-month and six-month periods ended June 30, 2014, one individual customer accounted for 67 percent and 63 percent of net product revenue, respectively. As of June 30, 2014, one customer accounted for 66 percent of accounts receivable. No other customer accounted for more than 10 percent of net product revenue for either 2015 or 2014 or accounts receivable as of either June 30, 2015 or 2014. |
Segment Reporting and Geographic Information | Segment Reporting and Geographic Information The Company organizes itself into one operating segment reporting to the Chief Executive Officer. For the three-month periods ended June 30, 2015 and 2014, net product revenue from customers outside the United States totaled 22 percent and 33 percent of the Company’s consolidated net product revenue, respectively, with 8 percent and 22 percent, respectively, representing product revenue from customers in Germany. For the six-month periods ended June 30, 2015 and 2014, product revenue from customers outside the United States totaled 22 percent and 37 percent of the Company’s consolidated net product revenue respectively, with 9 percent and 26 percent, respectively, representing net product revenue from customers in Germany. Long lived assets outside the United States totaled $1.4 million at June 30, 2015 and $1.3 million at June 30, 2014. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements For a discussion of recent accounting pronouncements please refer to Note 1, “Nature of Business and Significant Accounting Policies” in the 2014 Annual Report on Form 10-K. The Company did not adopt any new pronouncements during the six months ended June 30, 2015 that had a material effect on the Company’s condensed consolidated financial statements. In April 2015, the FASB issued amended accounting guidance related to the presentation of debt issuance costs in the financial statements. This guidance requires an entity to present such costs in the balance sheet as a direct deduction from the related debt rather than as an asset. This amendment will be effective for us in the first quarter of fiscal 2017, with early adoption permitted. Adoption of the guidance would reclassify debt issuance costs from other assets to long-term obligations, less current portion within the condensed consolidated balance sheet. The Company does not expect the adoption to have a material impact on its financial position or results of operations, and are currently evaluating the timing of adoption. In May 2014, the FASB issued amended accounting guidance related to revenue recognition. This guidance is based on the principle that revenue is recognized in an amount that reflects the consideration to which an entity expects to be entitled in exchange for the transfer of goods or services to customers. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This amendment will be effective for the Company in the first quarter of fiscal 2018. The Company is continuing to evaluate the options for adoption and the impact on its financial position and results of operations. |
Significant Accounting Polici27
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Product Revenue Allowances and Reserve Categories | The following table summarizes the activity in each of the above product revenue allowances and reserve categories for the six-month period ended June 30, 2015: In thousands Trade Rebates, Other Total Balance, January 1, 2015 $ 72 $ 2,095 $ 360 $ 2,527 Provision 255 2,097 218 2,570 Payments or credits (228 ) (1,645 ) (158 ) (2,031 ) Balance, March 31, 2015 99 2,547 420 3,066 Provision 304 3,262 228 3,794 Payments or credits (289 ) (2,808 ) (62 ) (3,159 ) Balance, June 30, 2015 $ 114 $ 3,001 $ 586 $ 3,701 |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Inventories | All of the Company’s inventories relate to the manufacturing of Iclusig. The following table sets forth the Company’s inventories as of June 30, 2015 and December 31, 2014: In thousands 2015 2014 Raw materials $ — $ — Work in process 120 460 Finished goods 1,205 979 1,325 1,439 Current portion (1,325 ) (979 ) Non-current portion included in intangible and other assets, net $ — $ 460 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Property and Equipment, Net | Property and equipment, net, was comprised of the following at June 30, 2015 and December 31, 2014: In thousands 2015 2014 Leasehold improvements $ 22,717 $ 22,315 Construction in progress 220,907 196,027 Equipment and furniture 24,131 23,511 267,755 241,853 Less accumulated depreciation and amortization (40,528 ) (38,826 ) $ 227,227 $ 203,027 |
Intangible and Other Assets, 30
Intangible and Other Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Intangible and Other Assets, Net | Intangible and other assets, net, were comprised of the following at June 30, 2015 and December 31, 2014: In thousands 2015 2014 Capitalized patent and license costs $ 5,975 $ 5,975 Less accumulated amortization (5,054 ) (5,036 ) 921 939 Inventory, non-current — 460 Other assets 2,358 2,494 $ 3,279 $ 3,893 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Other Current Liabilities | Other current liabilities consisted of the following at June 30, 2015 and December 31, 2014: In thousands 2015 2014 Amounts received in advance of revenue recognition $ 19,684 $ 17,186 Other 526 644 $ 20,210 $ 17,830 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Outstanding Convertible Note Balances | The outstanding convertible note balances as of June 30, 2015 and December 31, 2014 consisted of the following: In thousands 2015 2014 Principal $ 200,000 $ 200,000 Less: debt discount, net (39,118 ) (43,092 ) Net carrying amount $ 160,882 $ 156,908 |
Interest Expense Related to Convertible Notes | Interest expense related to the convertible notes during for the three-month and six-month periods ended June 30, 2015 consisted of the following: Three Months Ended June 30, Six Months Ended June 30, In thousands 2015 2014 2015 2014 Contractual interest expense $ 1,813 $ 262 $ 3,625 $ 262 Amortization of debt discount 1,965 269 3,973 269 Amortization of debt issuance costs 35 5 70 5 $ 3,813 $ 536 $ 7,668 $ 536 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Changes in Stockholders' Equity (Deficit) | The changes in stockholders’ equity (deficit) for the six-month period ended June 30, 2015 were as follows: Common Stock Additional Other Accumulated $ in thousands Shares Amount Capital Income (Loss) Deficit Total Balance, January 1, 2015 187,294,094 $ 187 $ 1,299,394 $ (4,185 ) $ (1,214,595 ) $ 80,801 Issuance of common stock pursuant to ARIAD stock plans 1,420,060 2 2,620 2,621 Stock-based compensation 19,078 19,078 Payment of tax withholding obligations related to stock-based compensation (175 ) (175 ) Other comprehensive loss (259 ) (259 ) Net loss (115,835 ) (115,835 ) Balance, June 30, 2015 188,714,514 $ 189 $ 1,320,917 $ (4,444 ) $ (1,330,429 ) $ (13,767 ) |
Stock Compensation (Tables)
Stock Compensation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Total Compensation Cost from Share-Based Payments | The Company’s statements of operations included total compensation cost from awards under the plans and purchases under the ESPP for the three-month and six-month periods ended June 30, 2015 and 2014, as follows: Three Months Ended June 30, Six Months Ended June 30, In thousands 2015 2014 2015 2014 Compensation cost from: Stock options $ 4,129 $ 4,164 $ 8,371 $ 8,844 Stock and stock units 6,395 4,178 10,461 7,826 Purchases of common stock at a discount 120 107 246 275 $ 10,644 $ 8,449 $ 19,078 $ 16,945 Compensation cost included in: Research and development expenses $ 4,180 $ 3,633 $ 7,996 $ 7,341 Selling, general and administrative expenses 6,464 4,816 11,082 9,604 $ 10,644 $ 8,449 $ 19,078 $ 16,945 |
Stock Option Activity | Stock option activity under the Company’s stock plans for the six-month period ended June 30, 2015 was as follows: Number of Weighted Options outstanding, January 1, 2015 10,148,087 $ 10.09 Granted 895,730 $ 8.06 Forfeited (378,848 ) $ 10.41 Exercised (518,321 ) $ 5.94 Options outstanding June, 30, 2015 10,146,648 $ 10.11 |
Stock and Stock Unit Activity | Stock and stock unit activity under the Company’s stock plans for the six-month period ended June 30, 2015 was as follows: Number of Weighted Stock units outstanding, January 1, 2015 3,503,153 $ 9.97 Granted / awarded 3,002,575 $ 8.70 Forfeited (66,793 ) $ 7.83 Vested or restrictions lapsed (937,137 ) $ 10.12 Stock units outstanding, June 30, 2015 5,501,798 $ 9.28 |
Performance Share Units Awarded | Included in the table above are performance share units which were awarded from 2012 to 2015 as follows: Years of Accrual Number of Units Description of Metric 2012 121,200 Approval of Iclusig in Europe – achieved in 2013 2013 316,000 Brigatinib clinical trial enrollment (100%) 2014 1,044,000 Iclusig clinical trial enrollment (50%); cumulative 2 year revenues from sales of Iclusig (50%) 2015 751,300 Iclusig clinical trial enrollment (325,000 units); 2015 revenues from sales of Iclusig (325,000 units); total relative return on common stock 2015-2017 (101,300 units) |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Calculation of Net Income (Loss) and Number of Shares Used to Compute Basic and Diluted Earnings Per Share | The calculation of net loss and the number of shares used to compute basic and diluted earnings per share for the three-month and six-month periods ended June 30, 2015 and 2014 are as follows: Three Months Ended June 30, Six Months Ended June 30, In thousands, except per share data 2015 2014 2015 2014 Net loss $ (63,160 ) $ (56,921 ) $ (115,835 ) $ (106,743 ) Net loss per share – basic and diluted $ (0.33 ) $ (0.30 ) $ (0.62 ) $ (0.57 ) Weighted average shares – basic and diluted 188,598 186,815 188,220 186,535 |
Accumulated Other Comprehensi36
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Changes in Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) for three-month and six-month periods ended June 30, 2015 were as follows: In thousands Cumulative Defined Total Balance, April 1, 2015 $ 410 $ (4,282 ) $ (3,872 ) Other comprehensive income (loss) (77 ) (495 ) (572 ) Balance, June 30, 2015 $ 333 $ (4,777 ) $ (4,444 ) In thousands Cumulative Defined Total Balance, January 1, 2015 $ 174 $ (4,359 ) $ (4,185 ) Other comprehensive income (loss) 159 (418 ) (259 ) Balance, June 30, 2015 $ 333 $ (4,777 ) $ (4,444 ) |
Defined Benefit Pension Oblig37
Defined Benefit Pension Obligation (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Net Periodic Benefit Cost for Defined Benefit Pension Plan | The net periodic benefit cost for the defined benefit pension plan for the three-month and six-month periods ended June 30, 2015 and 2014 was as follows: Three Months Ended June 30, Six Months Ended June 30, In thousands 2015 2014 2015 2014 Service cost $ 440 $ 303 $ 888 $ 591 Interest cost 19 46 69 89 Expected return on plan assets (12 ) (38 ) (49 ) (75 ) Amortization of prior service cost 87 41 164 82 Net periodic benefit cost $ 534 $ 352 $ 1,072 $ 687 |
Significant Accounting Polici38
Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015USD ($)Customer | Jun. 30, 2014USD ($)Customer | Jun. 30, 2015USD ($)CustomerSegment | Jun. 30, 2014USD ($)Customer | |
Schedule Of Significant Accounting Policies [Line Items] | ||||
Inventory adjustments | $ 245,000 | $ 3,200,000 | $ 245,000 | $ 3,200,000 |
Aggregate gross selling price of shipments | 20,800,000 | |||
Payment received on shipment | 19,400,000 | $ 19,400,000 | ||
Number Of customers accounted for accounts receivable | Customer | 1 | 1 | ||
Number of operating segments | Segment | 1 | |||
Outside the United States | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Long lived assets | $ 1,400,000 | $ 1,300,000 | $ 1,400,000 | $ 1,300,000 |
Net product revenue | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Number of customers accounted for net product sales | Customer | 1 | 1 | 1 | 1 |
Net product revenue | Customer One Product Sales | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Customers concentration risk, percentage | 78.00% | 67.00% | 78.00% | 63.00% |
Net product revenue | Outside the United States | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Customers concentration risk, percentage | 22.00% | 33.00% | 22.00% | 37.00% |
Net product revenue | Outside the United States | Germany | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Customers concentration risk, percentage | 8.00% | 22.00% | 9.00% | 26.00% |
Accounts receivable | Customer One Product Sales | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Customers concentration risk, percentage | 68.00% | 66.00% | ||
Maximum | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Capitalized costs, amortization period maximum | 17 years |
Summary of Product Revenue Allo
Summary of Product Revenue Allowances and Reserve Categories (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Mar. 31, 2015 | Jun. 30, 2015 | |
Valuation Allowance [Line Items] | ||
Beginning balance | $ 2,527 | $ 2,527 |
Provision | 2,570 | 3,794 |
Payments or credits | (2,031) | (3,159) |
Ending balance | 3,066 | 3,701 |
Trade Allowances | ||
Valuation Allowance [Line Items] | ||
Beginning balance | 72 | 72 |
Provision | 255 | 304 |
Payments or credits | (228) | (289) |
Ending balance | 99 | 114 |
Rebates Chargebacks and Discounts | ||
Valuation Allowance [Line Items] | ||
Beginning balance | 2,095 | 2,095 |
Provision | 2,097 | 3,262 |
Payments or credits | (1,645) | (2,808) |
Ending balance | 2,547 | 3,001 |
Other Incentives/ Returns | ||
Valuation Allowance [Line Items] | ||
Beginning balance | 360 | 360 |
Provision | 218 | 228 |
Payments or credits | (158) | (62) |
Ending balance | $ 420 | $ 586 |
License and Collaboration Agr40
License and Collaboration Agreements - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Apr. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Cash received from Japanese tax authorities | $ 15,800,000 | ||
Otsuka Pharmaceutical Co. Ltd | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Term of license fee | 10 years | ||
Otsuka Pharmaceutical Co. Ltd | Japan | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Refundable withholding tax | $ 15,800,000 | $ 15,800,000 | |
Otsuka Pharmaceutical Co. Ltd | License agreement | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Proceeds from license fees | 77,500,000 | ||
Revenue recognized during the period | 1,300,000 | ||
Otsuka Pharmaceutical Co. Ltd | License agreement | Maximum | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Additional milestone payments | 80,000,000 | 80,000,000 | |
Medinol Ltd. | License agreement | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Milestone payments for clinical trials | 3,750,000 | ||
Medinol Ltd. | License agreement | Maximum | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Additional milestone payments | $ 34,750,000 | $ 34,750,000 |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Inventory [Line Items] | ||
Raw materials | $ 0 | $ 0 |
Work in process | 120 | 460 |
Finished goods | 1,205 | 979 |
Total | 1,325 | 1,439 |
Current portion | (1,325) | (979) |
Non-current portion included in intangible and other assets, net | 460 | |
Total | $ 1,325 | $ 1,439 |
Property and Equipment, Net (De
Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 267,755 | $ 241,853 |
Less accumulated depreciation and amortization | (40,528) | (38,826) |
Property plant and equipment, net | 227,227 | 203,027 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 22,717 | 22,315 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 220,907 | 196,027 |
Equipment and furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 24,131 | $ 23,511 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||||
Construction in progress and facility lease obligation | $ 219,300,000 | $ 219,300,000 | $ 196,000,000 | ||
Depreciation and amortization expense | $ 848,000 | $ 1,200,000 | $ 1,700,000 | $ 2,500,000 |
Other Assets, Net (Detail)
Other Assets, Net (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Less accumulated amortization | $ (5,054) | $ (5,036) |
Intangible assets, net | 921 | 939 |
Inventory, non-current | 460 | |
Other assets | 2,358 | 2,494 |
Intangible and other assets | 3,279 | 3,893 |
Capitalized patent and license costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 5,975 | $ 5,975 |
Other Current Liabilities (Deta
Other Current Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Other Current Liabilities [Line Items] | ||
Amounts received in advance of revenue recognition | $ 19,684 | $ 17,186 |
Other | 526 | 644 |
Other current liabilities | $ 20,210 | $ 17,830 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 17, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||||
Net proceeds from issuance of convertible notes | $ 194,000 | |||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | $ 200,000 | $ 200,000 | $ 200,000 | |
Net proceeds from issuance of convertible notes | 192,900 | |||
Fees related to debt | 6,000 | |||
Cost and expense related to debt | 1,100 | |||
Expected life of debt | 5 years | |||
Senior Notes | Convertible Note Hedge | ||||
Debt Instrument [Line Items] | ||||
Net proceeds from issuance of convertible notes | $ 43,200 | |||
Senior Notes | Liability Component | ||||
Debt Instrument [Line Items] | ||||
Debt instruments, effective interest rate | 9.625% |
Outstanding Convertible Note Ba
Outstanding Convertible Note Balances (Detail) - Senior Notes - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 17, 2014 |
Convertible Debt [Line Items] | |||
Principal | $ 200,000 | $ 200,000 | $ 200,000 |
Less: debt discount, net | (39,118) | (43,092) | |
Net carrying amount | $ 160,882 | $ 156,908 |
Interest Expense Related to Con
Interest Expense Related to Convertible Notes (Detail) - Senior Notes - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Schedule Of Interest Expenses [Line Items] | ||||
Contractual interest expense | $ 1,813 | $ 262 | $ 3,625 | $ 262 |
Amortization of debt discount | 1,965 | 269 | 3,973 | 269 |
Amortization of debt issuance costs | 35 | 5 | 70 | 5 |
Total interest expense | $ 3,813 | $ 536 | $ 7,668 | $ 536 |
Lease, Licensed Technology and
Lease, Licensed Technology and Other Commitments - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Sep. 30, 2013ft² | Jan. 31, 2013ft² | May. 31, 2012ft² | Jun. 30, 2015USD ($)ft²RenewalOptions | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)ft²RenewalOptions | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Operating Lease Obligations [Line Items] | ||||||||
Facility lease obligation | $ 219,300,000 | $ 219,300,000 | $ 196,000,000 | |||||
Current portion of long-term facility lease obligation | 7,100,000 | 7,100,000 | $ 6,707,000 | |||||
Aggregate base salaries payable to officers, due on 2015 | 4,500,000 | 4,500,000 | ||||||
Aggregate base salaries payable to officers, due on 2016 | 12,100,000 | 12,100,000 | ||||||
Aggregate base salaries payable to officers, due on 2017 | 7,900,000 | 7,900,000 | ||||||
Lease Agreements | ||||||||
Operating Lease Obligations [Line Items] | ||||||||
Future minimum annual rental payments under operating lease due, remainder of year | 7,700,000 | 7,700,000 | ||||||
Future minimum annual rental payments under operating lease due, year two | 15,900,000 | 15,900,000 | ||||||
Future minimum annual rental payments under operating lease due, year three | 32,700,000 | 32,700,000 | ||||||
Future minimum annual rental payments under operating lease due, year four | 38,200,000 | 38,200,000 | ||||||
Future minimum annual rental payments under operating lease due, year five | 36,200,000 | 36,200,000 | ||||||
Future minimum annual rental payments under operating lease due, thereafter | 361,900,000 | 361,900,000 | ||||||
Operating lease rent expense | 2,600,000 | $ 4,500,000 | 1,900,000 | $ 3,800,000 | ||||
Contingent rent expense | $ 327,000 | $ 539,000 | $ 158,000 | $ 338,000 | ||||
Lease Agreements | Landsdowne and Sidney Streets, Cambridge Massachusetts | ||||||||
Operating Lease Obligations [Line Items] | ||||||||
Area of office and laboratory in square foot | ft² | 100,000 | 100,000 | ||||||
Lease expiration date | 2017-08 | 2019-07 | ||||||
Number of consecutive renewal options | RenewalOptions | 2 | 2 | ||||||
Operating lease renewal options, lease term in years | 5 years | |||||||
Operating lease, letters of credit outstanding | $ 1,400,000 | $ 1,400,000 | ||||||
Additional square feet of office space | ft² | 26,000 | |||||||
Future minimum annual rental payments under operating lease due, remainder of year | 3,100,000 | 3,100,000 | ||||||
Future minimum annual rental payments under operating lease due, year two | 5,900,000 | 5,900,000 | ||||||
Future minimum annual rental payments under operating lease due, year three | 6,000,000 | 6,000,000 | ||||||
Future minimum annual rental payments under operating lease due, year four | 6,100,000 | 6,100,000 | ||||||
Future minimum annual rental payments under operating lease due, year five | 3,600,000 | $ 3,600,000 | ||||||
Lease Agreements | Binney Street, Cambridge, Massachusetts | ||||||||
Operating Lease Obligations [Line Items] | ||||||||
Operating lease renewal options, lease term in years | 5 years | |||||||
Operating lease, letters of credit outstanding | 9,200,000 | $ 9,200,000 | ||||||
Additional square feet of office space | ft² | 142,000 | |||||||
Future minimum annual rental payments under operating lease due, remainder of year | 3,800,000 | 3,800,000 | ||||||
Future minimum annual rental payments under operating lease due, year two | 8,700,000 | 8,700,000 | ||||||
Future minimum annual rental payments under operating lease due, year three | 25,500,000 | 25,500,000 | ||||||
Future minimum annual rental payments under operating lease due, year four | 31,000,000 | 31,000,000 | ||||||
Future minimum annual rental payments under operating lease due, year five | 31,500,000 | $ 31,500,000 | ||||||
Area of laboratory and office space under lease agreement | ft² | 386,000 | 244,000 | ||||||
Period in which leased facility will be available for occupancy | 2015-03 | |||||||
Construction of tenant improvement expected completion date | In the third quarter of 2016. | |||||||
Construction in progress | 220,900,000 | $ 220,900,000 | ||||||
Facility lease obligation | 219,300,000 | 219,300,000 | ||||||
Current portion of long-term facility lease obligation | 7,100,000 | $ 7,100,000 | ||||||
Operating lease term | 15 years | |||||||
Number of renewal options | RenewalOptions | 3 | |||||||
Future minimum annual rental payments under operating lease due, thereafter | 357,400,000 | $ 357,400,000 | ||||||
Lease Agreements | Lausanne Switzerland | ||||||||
Operating Lease Obligations [Line Items] | ||||||||
Future minimum annual rental payments under operating lease due, remainder of year | 500,000 | 500,000 | ||||||
Future minimum annual rental payments under operating lease due, year two | 1,100,000 | 1,100,000 | ||||||
Future minimum annual rental payments under operating lease due, year three | 1,100,000 | 1,100,000 | ||||||
Future minimum annual rental payments under operating lease due, year four | 1,100,000 | 1,100,000 | ||||||
Future minimum annual rental payments under operating lease due, year five | 1,100,000 | 1,100,000 | ||||||
Area of laboratory and office space under lease agreement | ft² | 22,000 | |||||||
Operating lease term | 10 years | |||||||
Future minimum annual rental payments under operating lease due, thereafter | $ 4,500,000 | $ 4,500,000 | ||||||
Year in which leased facility will be available for occupancy | 2,014 | |||||||
Number of lease years before optional extension and early termination can be exercised | 5 years |
Changes in Stockholders' Equity
Changes in Stockholders' Equity (Deficit) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Stockholders Equity Note [Line Items] | ||||
Beginning Balance | $ 80,801 | |||
Issuance of common stock pursuant to ARIAD stock plans | 2,621 | |||
Stock-based compensation | 19,078 | |||
Payment of tax withholding obligations related to stock-based compensation | (175) | |||
Other comprehensive (loss) | $ (572) | $ 44 | (259) | $ 84 |
Net loss | (63,160) | $ (56,921) | (115,835) | $ (106,743) |
Ending Balance | $ (13,767) | $ (13,767) | ||
Common Stock | ||||
Stockholders Equity Note [Line Items] | ||||
Beginning Balance (in shares) | 187,294,094 | |||
Beginning Balance | $ 187 | |||
Issuance of common stock pursuant to ARIAD stock plans (in shares) | 1,420,060 | |||
Issuance of common stock pursuant to ARIAD stock plans | $ 2 | |||
Ending Balance (in shares) | 188,714,514 | 188,714,514 | ||
Ending Balance | $ 189 | $ 189 | ||
Additional Paid-in Capital | ||||
Stockholders Equity Note [Line Items] | ||||
Beginning Balance | 1,299,394 | |||
Issuance of common stock pursuant to ARIAD stock plans | 2,620 | |||
Stock-based compensation | 19,078 | |||
Payment of tax withholding obligations related to stock-based compensation | (175) | |||
Ending Balance | 1,320,917 | 1,320,917 | ||
Accumulated Other Comprehensive Income | ||||
Stockholders Equity Note [Line Items] | ||||
Beginning Balance | (4,185) | |||
Other comprehensive (loss) | (259) | |||
Ending Balance | (4,444) | (4,444) | ||
Accumulated Deficit | ||||
Stockholders Equity Note [Line Items] | ||||
Beginning Balance | (1,214,595) | |||
Net loss | (115,835) | |||
Ending Balance | $ (1,330,429) | $ (1,330,429) |
Fair Value of Financial Instr51
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 17, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Convertible notes, fair value | $ 231,500 | $ 203,400 | |
Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Convertible notes, face value | $ 200,000 | $ 200,000 | $ 200,000 |
Stock Compensation - Additional
Stock Compensation - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2009 | Jun. 30, 2008 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 1997 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options remaining contractual term | 10 years | |||||
Stock Option Plan 2014 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares available for awards under the plan | 9,451,009 | |||||
Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Reserved common stock for issuance under the plan | 500,000 | |||||
Additional shares of common stock reserved | 750,000 | 750,000 | 500,000 | |||
Payroll withholding period for purchase of shares of common stock | 6 months | |||||
Shares of common stock issued under the plan | 128,151 | 118,644 | ||||
Minimum | Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Purchase price of common stock by employees | 85.00% | |||||
Stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options remaining contractual term | 10 years | |||||
Stock options | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options, vesting period | 3 years | |||||
Stock options | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options, vesting period | 4 years | |||||
Stock and stock units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total fair value of stock and stock unit awards vested | $ 6.8 | $ 4.1 | ||||
Restricted shares or units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation expense | $ 21.4 | |||||
Weighted average period of compensation cost expected to be recognized | 1 year 8 months 12 days | |||||
Performance share units | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of Compensation Expense | 60.00% |
Total Compensation Cost from Sh
Total Compensation Cost from Share-Based Payments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation cost | $ 10,644 | $ 8,449 | $ 19,078 | $ 16,945 |
Research and development expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation cost | 4,180 | 3,633 | 7,996 | 7,341 |
Selling, general and administrative expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation cost | 6,464 | 4,816 | 11,082 | 9,604 |
Purchases of common stock at a discount | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation cost | 120 | 107 | 246 | 275 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation cost | 4,129 | 4,164 | 8,371 | 8,844 |
Stock and stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation cost | $ 6,395 | $ 4,178 | $ 10,461 | $ 7,826 |
Stock Option Activity (Detail)
Stock Option Activity (Detail) - 6 months ended Jun. 30, 2015 - $ / shares | Total |
Number of Shares | |
Options outstanding, January 1, 2015 | 10,148,087 |
Granted | 895,730 |
Forfeited | (378,848) |
Exercised | (518,321) |
Options outstanding June, 30, 2015 | 10,146,648 |
Weighted Average Exercise Price Per Share | |
Options outstanding, January 1, 2015 | $ 10.09 |
Granted | 8.06 |
Forfeited | 10.41 |
Exercised | 5.94 |
Options outstanding June, 30, 2015 | $ 10.11 |
Stock and Stock Unit Activity (
Stock and Stock Unit Activity (Detail) - 6 months ended Jun. 30, 2015 - Stock and stock units - $ / shares | Total |
Number of Shares | |
Stock units outstanding, January 1, 2015 | 3,503,153 |
Granted / awarded | 3,002,575 |
Forfeited | (66,793) |
Vested or restrictions lapsed | (937,137) |
Stock units outstanding, June 30, 2015 | 5,501,798 |
Weighted Average Exercise Price Per Share | |
Outstanding, January 1, 2015 | $ 9.97 |
Granted / awarded | 8.70 |
Forfeited | 7.83 |
Vested or restrictions lapsed | 10.12 |
Outstanding, June 30, 2015 | $ 9.28 |
Performance Share Units Awarded
Performance Share Units Awarded (Detail) - Jun. 30, 2015 - Performance share units - shares | Total |
Year of Accrual 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Years of Accrual | 2,012 |
Number of Units | 121,200 |
Description of Metric | Approval of Iclusig in Europe - achieved in 2013 |
Year of Accrual 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Years of Accrual | 2,013 |
Number of Units | 316,000 |
Description of Metric | Brigatinib clinical trial enrollment (100%) |
Year of Accrual 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Years of Accrual | 2,014 |
Number of Units | 1,044,000 |
Description of Metric | Iclusig clinical trial enrollment (50%); cumulative 2 year revenues from sales of Iclusig (50%) |
Year of Accrual 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Years of Accrual | 2,015 |
Number of Units | 751,300 |
Description of Metric | Iclusig clinical trial enrollment (325,000 units); 2015 revenues from sales of Iclusig (325,000 units); total relative return on common stock 2015-2017 (101,300 units) |
Performance Share Units Award57
Performance Share Units Awarded (Parenthetical) (Detail) - Jun. 30, 2015 - Performance share units - shares | Total |
Year of Accrual 2013 | Brigatinib clinical trial enrollment | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting percent dependent upon achievement of specific commercial objectives | 100.00% |
Year of Accrual 2014 | Iclusig clinical trial enrollment | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting percent dependent upon achievement of specific commercial objectives | 50.00% |
Year of Accrual 2014 | cumulative 2 year revenues from sales of Iclusig | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting percent dependent upon achievement of specific commercial objectives | 50.00% |
Cumulative revenue from sales considered as milestone, number of years taken for measurement | 2 years |
Year of Accrual 2015 | Iclusig clinical trial enrollment | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of units vested upon milestone achievement | 325,000 |
Year of Accrual 2015 | 2015 revenues from sales of Iclusig | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of units vested upon milestone achievement | 325,000 |
Year of Accrual 2015 | total relative return on common stock 2015-2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of units vested upon milestone achievement | 101,300 |
Year of Accrual 2015 | total relative return on common stock 2015-2017 | Measurement start Year | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total relative return on common stock, measuring year for milestone | 2,015 |
Year of Accrual 2015 | total relative return on common stock 2015-2017 | Measurement end Year | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total relative return on common stock, measuring year for milestone | 2,017 |
Calculation of Net Income (Loss
Calculation of Net Income (Loss) and Number of Shares Used to Compute Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | ||||
Net loss | $ (63,160) | $ (56,921) | $ (115,835) | $ (106,743) |
Net loss per share - basic and diluted | $ (0.33) | $ (0.30) | $ (0.62) | $ (0.57) |
Weighted average shares outstanding - basic and diluted | 188,598 | 186,815 | 188,220 | 186,535 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ (3,872) | $ (4,185) | ||
Other comprehensive income (loss) | (572) | $ 44 | (259) | $ 84 |
Ending balance | (4,444) | (4,444) | ||
Net Unrealized Gains (Reclassification Adjustment) on Marketable Securities | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | 410 | 174 | ||
Other comprehensive income (loss) | (77) | 159 | ||
Ending balance | 333 | 333 | ||
Defined Benefit Pension Obligation | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (4,282) | (4,359) | ||
Other comprehensive income (loss) | (495) | (418) | ||
Ending balance | $ (4,777) | $ (4,777) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Taxes [Line Items] | ||||
Provision for income taxes | $ 300 | $ 106 | $ 514 | $ 225 |
Tax benefit, minimum percentage of likelihood of being realized upon ultimate settlement | 50.00% |
Restructuring Actions - Additio
Restructuring Actions - Additional Information (Detail) - 6 months ended Jun. 30, 2014 $ in Millions | USD ($)Position |
Restructuring Cost and Reserve [Line Items] | |
Restructuring expenses | $ 4.8 |
Number of positions reduced | Position | 155 |
Research and development expense | |
Restructuring Cost and Reserve [Line Items] | |
Employee separation costs | $ 2.2 |
Selling, general and administrative expense | |
Restructuring Cost and Reserve [Line Items] | |
Employee separation costs | $ 2.6 |
Net Periodic Benefit Cost for D
Net Periodic Benefit Cost for Defined Benefit Pension Plan (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 440 | $ 303 | $ 888 | $ 591 |
Interest cost | 19 | 46 | 69 | 89 |
Expected return on plan assets | (12) | (38) | (49) | (75) |
Amortization of prior service cost | 87 | 41 | 164 | 82 |
Net periodic benefit cost | $ 534 | $ 352 | $ 1,072 | $ 687 |
Defined Benefit Pension Oblig63
Defined Benefit Pension Obligation - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Expected contribution to the pension plan | $ 1.7 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Jul. 28, 2015 - Subsequent Event - PDL BioPharma $ in Millions | USD ($)Tranche |
Subsequent Event [Line Items] | |
Proceeds from collaborators | $ 50 |
Number of tranches | Tranche | 2 |
Future Maximum Royalty Payments Receivable in 2015 | $ 20 |
Royalty rate in 2015 | 2.50% |
Future Maximum Royalty Payments Receivable in 2016 | $ 20 |
Royalty rate in 2016 | 5.00% |
Royalty rate in 2019 | 6.50% |
Future Maximum Royalty Payments Receivable in 2017 | $ 20 |
Internal rate of return | 10.00% |
Royalty rate in 2017 | 5.00% |
Future Maximum Royalty Payments Receivable in 2018 | $ 20 |
Royalty rate in 2018 | 5.00% |
Royalty rate in year five | 5.00% |
Put And Call Options [Member] | |
Subsequent Event [Line Items] | |
Internal rate of return | 10.00% |
Maximum | |
Subsequent Event [Line Items] | |
Royalty Commitments, amount | $ 150 |
To be received one year from the effective date | |
Subsequent Event [Line Items] | |
Agreement amount | 50 |
To be received in two tranches between the sixth and twelve month anniversary dates | |
Subsequent Event [Line Items] | |
Agreement amount | $ 100 |
Royalty rate for the remainder of the agreement if the Company draws down in excess of $150 million | Maximum | |
Subsequent Event [Line Items] | |
Royalty rate for excess withdrawal | 7.50% |